The Mobile Commerce Revolution and the Current State of Mobile

The statistics in this chapter from The Mobile Commerce Revolution: Business Success in a Wireless World underline what is truly powerful about mobile technology: It’s not about enabling things we couldn’t have imagined. Instead, today’s mobile technology enables exactly what the average consumer could have imagined, albeit in settings and situations that could not have been predicted.

This chapter is from the book

Here’s a prediction: Right now, as you are reading this, you are within arm’s reach of a smartphone. How did we do? To be honest, it wasn’t a difficult prediction to make. Today, the majority of Americans own a smartphone, and 83% of them say they are always or nearly always within reach of their mobile device. You can walk into a convenience store, buy a prepaid, no-contract smartphone for under $100, and have the Internet in your pocket.

For years, technologists have been talking about “convergence” devices—technology that replaces two or more gadgets and gizmos. The smartphone has truly become the ultimate convergence device. Think about the devices it has replaced: media players, navigation devices, guidebooks, your wallet, and even your desktop computer. The smartphone has quickly become all these things.

Smartphones have also effectively ended the bar bet. Remember Norm and Cliff from the television series Cheers? Cliff’s character, a mailman played by John Ratzenberger, was often the instigator and arbiter of trivia questions at the show’s eponymous bar. Today, however, we are all Cliff. The answer to nearly any trivia question is just a mobile search away. In fact, having the answers in our pocket to “who sang that song?” and “who was that actor?” has conditioned us to expect the answers to nearly everything, whenever and wherever we need them. And that has changed our behavior, as we discuss later in the book.

Americans and Smartphones

Tom’s company, Edison Research, has been tracking mobile phone ownership, usage, and other mobile behaviors for nearly a decade in its annual Infinite Dial study, a long-running research series that has been providing representative data about technology and media usage in America since 1998. In the most recent Infinite Dial study from 2014, an estimated 160 million Americans, or 61% of Americans aged 12 and older, now own a smartphone (defined as an Android, iOS, Blackberry, or Windows-based phone). What this number masks, however, are some significant demographic and psychographic differentials in smartphone ownership. In fact, the numbers for smartphone ownership for people aged 12 to 34 are truly staggering—more than three-quarters in that demographic (and 74% of teens!) own a smartphone.

What’s truly interesting about smartphones (as compared to feature phones, which are non-smart phones without Internet access) is that a new generation of users has become as comfortable communicating with their thumbs as with their voices. When we asked mobile phone users how often they send or receive text messages on their phones, 75% of smartphone owners said several times per day, compared to just 29% of feature phone owners. Is this because smartphone owners are more communicative? Possibly, but unlikely. It’s far more likely the power of a smart-phone and the increased usage of apps on the mobile Internet makes users increasingly comfortable keeping the phone in front of them, rather than glued to their ear.

Indeed, we now have many means of communication available that simply didn’t exist five years ago. Consider apps like Instagram and Snapchat. Three in 10 smart-phone owners have Instagram accounts, making the company’s $1 billion sale to Facebook look like a bargain in retrospect, especially when you consider that Facebook paid $19 billion for the messaging app WhatsApp. Snapchat, which has only been around for three years as of this writing, is now used by 19% of smart-phone users. In fact, as shown in Figure 1.1 , nearly half of 12- to 24-year-olds use Snapchat (so the odds are good that your teenager does, too). Both services now tap into tens of millions of users who are using their phones to share images, messages, and above all, experiences in altogether new ways.

Figure 1.1 Snapchat usage amongst Americans 12-24

Nowhere is this more apparent than in the use of social media. An incredible 40% of social media users with smartphones check those sites and services several times per day. This translates to some fairly remarkable behaviors. For example, the average smartphone owner who has a profile on Facebook checks his account six times per day, and 60% of them say they access Facebook most via mobile phone.

Previously, we noted that 83% of smartphone owners have their phones nearly always within arm’s reach. This has resulted in many tens of millions relying on the phone as the first thing they look at in the morning (ostensibly after their spouse, as applicable)—indeed, for many smartphone owners, it is their device that actually wakes them up, replacing the clock radio. In fact, when asked what media they typically consume most at home in the morning, 24% of smartphone users indicated that it is their mobile device, second only to their television at 27%.

Of course, these stats can be slightly deceptive—after all, the smartphone has become the television, the radio, and the newspaper for so many. For the first time since Edison Research started tracking this stat in 2005, iPod ownership has actually declined, from 31% in 2013 to 29% in 2014. Today’s smartphone owners have started to essentially replace their dedicated music players with their phones, and as a result, their media consumption habits have also changed.

For example, have you ever listened to a podcast? Before smartphones became so ubiquitous, mobile consumption of a podcast consisted of downloading a media file to your desktop or laptop, and then transferring it over to a portable media player to listen to it on the go. Today, all the friction has gone out of this process. In 2014, for the first time, most podcast users report that they listen primarily to podcasts on their mobile devices, and not on a computer.

Smartphones have opened up media consumption opportunities for audio, video, and text that heretofore never existed (or were at least difficult propositions). YouTube videos, Netflix movies, Pandora radio stations—all are available at the touch of an app, on the bus, at the gym, and even at the bar, next to Cliff. In fact, 50% of all smartphone owners have downloaded the Pandora app, an estimated 80 million Americans aged 12+—a staggering number for an individual brand.

Nowhere are those increased consumption opportunities more apparent than in the car. The connected dashboard may or may not be a feature in your next car, but the fact is—it’s already here for smartphone owners. In fact, 26% of mobile phone owners have listened to Internet radio in the car by connecting their phones to their vehicles (either through Bluetooth, or simply through a cable in an auxiliary jack). This number has grown significantly over the past few years, as you can see in Figure 1.2.

This has opened up a world of opportunity for media producers to have their content consumed in new places, in new settings, and by multiple people (by freeing their content from the confines of the earbud). As a result, overall media consumption continues to rise; we are consuming media nearly every waking moment.